ITT Educational Services—The CtW Investment Group is urging the company’s shareholders to vote against the re-election of directors Joanna Lau and Samuel Odle. CtW says these directors, who are the only ones standing for re-election this year, and other members of the board “have failed to properly oversee or demand accountability for ITT’s executives, and, as a consequence, have put shareholders at risk.” In addition, CtW points to an accounting suit filed against the company by the SEC as well as a share price drop of nearly 40 percent over the past quarter. In terms of governance practices, CtW notes the company still has a classified board and it significantly increased pay for both the CEO and CFO despite the declining share price. The vote-no campaign targets Lau because she has served on the audit committee since 2003 and Odle because he has served on the compensation and nominating and governance committees since 2006.

July 29

McKesson—Shareholders will vote on a proposal filed by the International Brotherhood of Teamsters asking the company to eliminate acceleration of any equity award granted to a senior executive at the time of change in control, and calling for the pro-rata vesting of equity awards upon a termination in connection with a change in control. The Teamsters point out that the company’s 2015 proxy statement indicates that McKesson could have to pay more than $283 million in unearned compensation to five executives in the event of a change in control and termination. This, it says, would be in addition to more than $245 million that the executives would receive in severance pay and benefits guaranteed to them. In opposing the proposal, the company’s board says accelerated vesting in appropriate circumstances permits management to remain objective and focused on protecting shareholders’ interests and maximizing shareholder value during the course of a potential change in control. It also says accelerated vesting will mitigate uncertainty and reduce the risk of executive turnover during a change in control.

In addition to the accelerated vesting proposal, McKesson shareholders will vote on a proposal filed by the City of Philadelphia Public Employees Retirement System and the Miami Firefighters’ Relief and Pension Fund asking the company to provide a semi-annual report disclosing company policies and procedures for direct and indirect political contributions and expenditures.

A management proposal on proxy access also appears on McKesson’s proxy ballot. The proposal would amend the company’s bylaws to allow any group of up to 20 shareholders who have owned at least 3 percent of the outstanding common shares for at least three years to nominate 20 percent of the directors on the board. A proxy access proposal was submitted by the New York City Pension Funds in 2014. In June 2014, the company announced that it planned to submit a proxy access bylaw amendment “in response to shareholder feedback and the board’s continuing evaluation of governance best practices.” The pension funds withdrew the proposal after the announcement.

August 4

Airgas—The Illinois State Board of Investment filed a proposal asking the company to repeal its classified board to allow for the annual election of all directors. The proponent says board declassification would make directors more accountable to shareholders. In opposing the proposal, the board argues that the company’s high annual shareholder returns and its reduced vulnerability to abusive takeover tactics can be attributed to the classified board structure. Similar proposals received majority support for the past three years, but the company decided not to act on them noting that they had not received the support of 67 percent of the outstanding shares required for passage.

As a result of the inaction on these classified board proposals, the International Brotherhood of Teamsters is urging the company’s shareholders to withhold their votes for all three directors who are standing for re-election at the 2015 annual meeting. The Teamsters say they are opposing the re-election of James Hovey, Paula Sneed and David Stout, who serve on the company’s governance and compensation committee, as a result of their failure to implement the proposals to declassify the board despite strong shareholder support.

Airgas shareholders will also vote on a proposal submitted by the United Brotherhood of Carpenter and Joiners of America asking the company to take the necessary steps to provide for a majority vote standard in director elections. In its supporting statement, the board says the vote standard would enhance board accountability and improve board performance. The board argues that the company currently has other provisions such as the ability to call special meetings that would allow shareholders to remove and replace all directors in a short period.